City Staff Makes the Case for Annexation Plan

The City has begun public hearings on limited purpose annexation of three areas (in blue) and will soon do the same for the other two areas (in red). Courtesy/City of San Antonio

Updated December 21, 2017

The gap between pro-annexation voices and those who question the cost/benefit of more suburban growth was on display at Wednesday’s City Council B Session. The mayor and council members do not vote on issues in their Wednesday B Sessions, but judging by the comments made by individual council members, the pro-annexation position held by City Manager Sheryl Sculley and her top planners appears to be prevailing over concerns vocalized by Mayor Ivy Taylor.

Gauging the consequences of suburban sprawl and its potential impact on the City’s efforts to revive San Antonio’s urban core, Mayor Ivy Taylor has urged a slower, modified approach to San Antonio’s first series of annexations in more than a decade. City staffers, however, told the City Council on Wednesday that such an approach could be more expensive than staying with an approved, three-year planning process for annexing five targeted outlying areas.

At the same time, it now appears that City staff are not going forward in annexation planning for six additional areas, due to an absence of Council direction and funding.

After Wednesday’s meeting, Taylor told reporters she is pleased the City is not proceeding with planning for the six other areas. She recently wrote the Council and City Manager Sheryl Sculley to express concerns that an aggressive annexation schedule would siphon off resources needed to address critical infrastructure needs in the inner city. Taylor had a more limited annexation strategy that focused on commercial corridors.

That approach, the City’s Planning and Community Development Director John Dugan said, would be too expensive and would leave uncollected tens of millions of dollars in new tax revenue on the table.

The City’s Planning and Community Development Department says modifying its existing annexation plan for three areas could yield a negative operating fiscal impact over 20 years. Image courtesy of the City of San Antonio.

City staff is actively planning limited purpose annexation of five areas by the end of 2016: along Interstate 10 West and I-10 East, U.S. 281 North, around Alamo Ranch, and U.S. Highway 90/Loop 1604. Residents would then be allowed to vote in city elections and City zoning ordinances would go into effect. No taxes would be collected during that time period.

If full annexation were to proceed after three years, the City would be required to deliver essential services equal to services delivered throughout San Antonio. It’s the capital and general fund costs of meeting those obligations that causes anti-annexation forces to question new city growth when the needs of the existing city can’t be met.

But potential tax income is at stake, too. The City projects $172 million in total revenue over 20 years if it were to fully annex the areas along I-10 West, I-10 East and U.S. 281. If only annexation of commercial land along 281 is allowed, the City could miss out on $35 million in the same 20-year period.

The city’s national profile also comes into play, although most boosters won’t openly say so. San Antonio would expand its geographic footprint by 66 square miles and add 200,000 people to the population base. That’s enough to propel it from seventh to fifth in the U.S. Census ranking of city populations. San Antonio’s MSA ranking, a more realistic measure of a city’s size and economy, would remain outside the top 20 even with such growth.

One further political complication is the strong public sentiment against annexation in the targeted areas.

Public hearings on annexation have begun on three priority areas: I-10 West. I-10 East and U.S. 281.
The City’s Planning and Community Development Department has jettisoned consideration of six other outlying areas, saying a $341,000 budget amendment would be needed to study those properties. Anti-annexation sentiment is rising, particularly in the 281 and Alamo Ranch areas.

“(The annexation schedule) did seem a bit hasty,” Mayor Taylor said following the meeting Wednesday. But the mayor acknowledged the validity of City staff’s data that shows modifying the existing annexation plan would be more expensive. Still, the mayor said she and other council members have more questions about the City’s overall annexation effort.

Staff recommends Scenario 1 to City Council because it would maximize tax revenues. Image courtesy of the City of San Antonio.

At the start of Wednesday’s meeting, Mayor Taylor said she had asked the City to provide a cost-benefit analysis of “expanding our footprint,” and the effect of such expansion on current city services. She also had asked staff to provide an estimate of new tax revenues the City can expect to collect via annexation, and how annexation will help the City better manage future growth.

“I am concerned about the philosophical bent that some people have that if we don’t expand, we can’t continue to grow,” Taylor told the Council. “I’m not saying annexation hasn’t been a useful (tool).”

She urged council members to consider the City’s policies for managing outward growth while promoting growth in long-established areas. Councilmember Alan Warrick (D2) asked what would happen if the City were to forgo annexation altogether while the City concentrates on continued inner city revitalization.

“I don’t think the City can do much of anything,” Dugan replied. He added that forgoing annexation could result in continued unsustainable growth in the unincorporated areas, and more outer-lying communities incorporating as cities that would prevent San Antonio from further expansion. Dugan is confident the tax revenue newly annexed areas could provide will benefit both newly annexed areas and the existing city core.

“These areas will generate more revenues than they’re going to use,” said Dugan. “We’ll be able to use these funds for other parts of the city.”

Despite the mayor’s concerns, a handful of council members said they are becoming more comfortable with the original annexation plan that targets the five scheduled areas.

Councilmember Ray Lopez (D6) asked about residents in the five targeted areas. What benefit would they see from paying for basic services they already receive from Bexar County, such as law enforcement and infrastructure maintenance?

Lopez, who said he supports staff’s plan, asked if the City and the County could work with developers to build up basic services in the targeted unincorporated areas. That way the City could gradually annex those areas, over time, that already would have improved services.

“Along the lines of what you said, mayor, I agree we have to figure out a way to manage growth and to provide value on the investment we’d make,” Lopez said.

Nirenberg asked for more discussion of the annexation plan, including impervious cover rules. Dugan said the City should consider increasing impervious cover percentages in targeted annexation areas during the three-year planning period. Two of the areas, along I-10 West and U.S. 281, sit above the Edwards Aquifer recharge zone.

Dugan recommended the issue be sent to the Council’s Neighborhoods and Livability Committee, which next meets Oct. 19. The committee, Dugan said, can produce updated maps that outline what newer developments have cropped up over the recharge zone, especially in the targeted annexation areas.

“Unless we make some changes, there will be more intense development in these areas,” Dugan said.

“I am of the belief that every acre above the Edwards Aquifer needs to be protected,” Council member Nirenberg said. “We need to rectify this issue going forward with annexation.”

Councilmember Mike Gallagher (D10) and Councilmember Rebecca Viagran (D3) also support the original annexation schedule. Annexing the targeted areas, they said, would protect local military installations from further encroachment by development and give the City more say in future growth in those areas. Gallagher expressed concern that the Texas legislature will limit the City’s ability to annex in its 2017 session.

“We’re going to grow, no matter what. Either we’re going to control it or someone else will,” Gallagher said.

10 thoughts on “City Staff Makes the Case for Annexation Plan”

As a resident of the I10 west area, I have an additional concern. My son attends Boerne schools- would annexation force him(and all of my neighbors’ kids) into Northside?
I have no voice in city council and they won’t listen to non San Antonio residents.

If existing commercial properties were taxed as fairly as residential properties within city limits, the revenue would be substantially increased. Our appraisal system needs to be more equitable, without lawsuits due to wording in the tax code which allows commercial comps to be unfairly used in order to adjust values downward There are several lawsuits filed now trying to address this issue within the state

The mayor and council should heed the public administrator’s advice and annex all three areas this year and the additional two areas the following year. Annexing these areas will grow the city’s tax base as it did in the 1970s and allow the city to provide more protection above the Edwards Aquifer Recharge Zone. It is not fair that these residents want to live in Bexar County, use many of our roads to get to work and shop and enjoy our parks. These are not rural residents but rather suburban residents and it is only fair for them to pay their fare share. It is important to take out the politics (the mayor and some council members have some sort of political agenda). and listen to the city administrators. Remember public servants (administrators) take an oath to do what is best for the city and annexing these areas provides so many more benefits than not annexing them. As for the police department? This is an ill advised attack and purely political. It’s funny how the concern for public safety came out after contract talks stalled. If this was a serious issue to begin with then the police chief should have raised this issue a months or a year ago. I believe SAPD officers make more than many of their counterparts in similar sized Texas cities and remember San Antonio has a cheaper cost of living. Or maybe his police officers and him live in these unincorporated areas and do not want to pay their share in taxes.